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Chapter 20. Building Discount Formulas > Simple Undiscounted Payback Period

Simple Undiscounted Payback Period

Finding the undiscounted payback period is a matter of calculating the cumulative cash flows and watching when they turn from negative to positive. The period that shows the first positive cumulative cash flow is the payback period.

For example, suppose that you purchase a store for $500,000 and project the following cash flows:


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